Question

Smt. Tejaswini purchased 100 shares of FV ₹ 80 when the MV is ₹ 900. She paid brokerage at the rate of 0.5% and 18% GST on brokerage. Find the following:

1. Net amount paid for 100 shares.
2. Brokerage paid on the sum invested.
3. GST paid on brokerage.
4. Total amount paid for 100 shares.

Answer 1

(1) Net Amount = Number of Shares × Market Value (MV)

Net Amount = 100 × 900

= 90, 000

(2) Brokerage is always calculated on the market value (MV) of the shares.

Brokerage Rate = 0.5% = 0.005

Total Brokerage = Net Amount × Brokerage Rate Total

Brokerage = 90,000 × 0.005

= 450

(3) GST is charged at 18% on the brokerage amount.

GST Rate = 18% = 0.18

GST on Brokerage = Total Brokerage × GST Rate

GST on Brokerage = 450 × 0.18

= 81

(4) The total cost to the investor is the sum of the net amount, the brokerage fee, and the GST on that fee.

Total Amount = Net Amount + Brokerage + GST

Total Amount = 90,000 + 450 + 81

= 90,531

Smt. Tejaswini paid a total of 90,531 for the 100 shares.